Tax office initiates tax declaration project in Hessen
The German state of Hessen is taking a significant step towards modernizing its tax administration with a new pilot project for automatic tax assessments. This initiative, launched under State Finance Minister Alexander Lorz, aims to streamline tax procedures and reduce bureaucratic burdens on taxpayers.
The project is currently being offered to around 6,000 taxpayers in the jurisdiction of Finanzamt Kassel who missed the deadline for their 2024 income tax return. Taxpayers will receive a pre-filled proposal from the authorities, which they can either accept or modify via the Elster online system.
The prerequisite for this pilot project is that the respective taxpayer is obliged to file an income tax return and is not represented or advised on tax matters. Not every employee in Germany is obliged to file a tax return, but those who receive replacement income such as unemployment benefits, parental benefits, or short-time work benefits of more than 410 euros per year, or have multiple employers, must file a tax return. Freelancers, self-employed individuals, and business owners are generally also required to file a tax return.
If a taxpayer does not respond to the proposal, the tax office will issue the tax assessment within four weeks. The proposal from the tax office is based on data such as income, pensions, and insurance, which are already available to the tax administration due to mandatory reporting requirements.
The German Tax Union, represented by federal chairman Florian Köbler, welcomes the pilot project as an important step towards a modern, citizen-friendly tax administration. Köbler explains that full digitalization could allow tax officials to focus on complex and important cases rather than spending time on standard cases. Further joint steps by the federal government and other states are needed to enable large-scale implementation of the tax assessment by the authority.
Joachim Papendick, chairman of the Bund der Steuerzahler Hessen, views the pilot project as a step in the right direction, but criticizes Germany's delay in implementing such a system. If successful, the program will be expanded, and the Hessian state government aims to relieve citizens and increase the efficiency of the tax administration with the pilot project in Kassel.
The benefits for taxpayers include potential convenience and time savings, as well as a reduction in errors or omissions in tax filing since the tax office provides a computed assessment proposal. Taxpayers retain the option to correct or supplement the proposal digitally, maintaining some control and transparency in the process.
The pilot aims to modernize and automate tax assessments in Hessen, which could lead to broader implementation if successful, improving administrative efficiency and taxpayer experience. However, detailed public information about further expansion phases or impacts is limited as the project is in its pilot stage as of mid-2025.
- The initiative by the State Finance Minister Alexander Lorz in Hessen, involving automatic tax assessments, is particularly relevant for businesses and self-employed individuals, as they are generally required to file a tax return.
- The pilot project, if successful in Kassel, could potentially offer benefits to business owners and freelancers, such as time savings and convenience, due to the pre-filled tax proposals provided by the authorities.
